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Income Statement Examples

The results of operations of a company is summarized in the income statement.


The income statement presents all revenues and all expenses. Revenues minus expenses is equal to net
income.
The net income is the primary measure of a company's financial performance for a particular period.
Here are examples of the income statement. The amounts are assumed and contents are simplified for
illustration purposes.

Example 1: Service Business


XYL Graphic Designs, Inc.
Income Statement
For the Year Ended December 31, 2015
Service Revenue
Less: Expenses
Salaries Expense
Rent Expense
Advertising Expense
Utilities Expense
Depreciation Expense
Supplies Expense
Income before Tax
Less: Income Tax Expense
Net Income

$ 270,000
80,000
30,000
16,000
10,000
8,000
2,000

146,000
$ 124,000
48,360
$ 75,640

The income statement starts with a heading made up of three lines. The heading contains: (1) the name
of the company, (2) the title of the financial statement, and (3) the period covered by the report.
The income statement of a service type business is quite simple. Revenue accounts are presented first
followed by all of the company's expenses. The resulting amount is then subjected to income tax. Note:
Income tax treatment depends upon the tax laws of the state/country.
Some income statements of service businesses present "Cost of Service" in a separate line after
revenues. It shows the expenses that are directly associated with the services rendered.

Example 2: Merchandising Business, and for Manufacturing too..


GHI Market Associates Corporation
Income Statement
For the Year Ended December 31, 2015
Sales
Less: Cost of Sales
Gross Profit

$ 960,000
680,000
$ 280,000

Less: Operating Expenses


Selling Expenses
Sales Salaries Expense
$ 40,000
Advertising Expense
15,000
Utilities Expense - Store
6,000
Depreciation Expense - Store
5,000
Store Supplies Expense
4,000 $ 70,000
Administrative Expenses
Office Salaries Expense
$ 22,500
Utilities Expense - Office
6,500
Depreciation Expense - Office
5,000
Permits and Licences
4,000
Office Supplies Expense
2,500
Bad Debts Expense
1,500
42,000
Total Operating Expenses
$ 112,000
Operating Income
Other Revenues and Expenses
Gain on Sale of Equipment
Interest Expense
Income before Tax
Less: Income Tax Expense
Net Income

$ 168,000
$ 20,000
(12,000)

8,000
$ 176,000
68,640
$ 107,360

Example 2 shows how an income statement of merchandising and manufacturing businesses would look
like. In the above example, a separate line for "Cost of Sales" is presented. It shows the cost of items
sold, hence also known as "Cost of Goods Sold".
Selling expenses were shown separately from administrative expenses. Selling expenses pertain to
expenses directly related to the selling and marketing functions. Administrative expense pertain to those
associated with the activities of the administration such as billing and collection, hiring, board meetings,
etc.

The difference between all revenues and all expenses is then subjected to income tax to arrive at the
company's net income.

Conclusion
Though they may be presented differently, all income statements have the same goal and purpose. An
income statement presents a company's revenues and expenses over a particular period of time, to give
the users information about the operating performance of the company. When studying company figures,
it is good to compare income statements over different periods or with income statements of other
companies.